RADIAN GROUP INC

The amount of capital that we must hold to maintain our various capital requirements can vary significantly from time to time and the capital needed to maintain those requirements may not be available or may only be available on unfavorable terms.

We conduct the vast majority of our business through our insurance subsidiaries, which are domiciled in the U.S. and the U.K.

For factors that could impact capital and liquidity at Radian Guaranty, our primary U.S. insurance subsidiary, see “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity.”

We participate in the Lloyd’s market through our ownership of Inigo Corporate Member Limited and Inigo Managing Agent Limited, two of our U.K. subsidiaries. Inigo Corporate Member Limited provides underwriting capacity to Syndicate 1301 and is a Lloyd’s corporate member. Underwriting capacity of a member of Lloyd’s must be supported by providing a Funds at Lloyd’s (“FAL”) deposit in the form of cash, securities or letters of credit. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA requirements and resource criteria. FAL is set with reference to the syndicate’s Solvency Capital Requirement under a capital adequacy model plus an economic capital assessment determined by Lloyd’s, known as the Lloyd’s uplift. The determination of FAL is made based on a number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in respect of business that has been underwritten. Inigo Managing Agent Limited uses an internal model, developed to meet the requirements of the Solvency UK regime, to calculate its regulatory capital requirements.

If Inigo’s FAL is materially decreased, we may be required or otherwise choose to: (i) retain capital in Inigo and/or contribute additional capital to Inigo; (ii) alter our strategy with respect to Inigo by limiting the type and volume of business we are willing to write; (iii) alter our investment policies or strategies; or (iv) seek additional capital relief through reinsurance or otherwise, which may not be available on acceptable terms or at all. Maintaining Inigo’s required FAL could impact our holding company liquidity if additional capital support for Inigo is required for Inigo to maintain its FAL requirements.

To the extent that cash flows generated by either Radian Guaranty or Inigo are insufficient to fund future operating requirements and cover claim losses, or that our capital position is adversely impacted by a decline in the fair value of our investment portfolio, losses from our insured risks or otherwise, we may need to raise additional funds through financings or curtail our growth. Many factors will affect the amount and timing of our capital needs, including our growth rate and profitability, our claims experience, and the availability of reinsurance, market disruptions and other unforeseeable developments. If we need to raise additional capital, equity or debt financing may not be available on acceptable terms or at all. In the case of equity financings, dilution to our stockholders could result. In the case of debt financings, we may be subject to covenants that restrict our ability to freely operate our business. If we cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating plans and our business, financial condition or results of operations could be materially adversely affected.

Our sources of liquidity may be insufficient to fund our obligations.

Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Analysis—Holding Company” for more information on our available liquidity and short-term and long-term liquidity demands.

As discussed above under “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity,” compliance with the PMIERs financial requirements could impact our holding company liquidity if additional capital support for Radian Guaranty is required for it to maintain this compliance. Similarly, Inigo is required to maintain FAL for the purposes of Solvency UK and Lloyd’s capital requirements as discussed above under “The amount of capital that we must hold to maintain our various capital requirements can vary significantly from time to time and the capital needed to maintain those requirements may not be available or may only be available on unfavorable terms.” The amount of capital that Radian Group could be required to contribute to Radian Guaranty or Inigo if capital support is needed is uncertain but could be significant.

In addition, Radian Mortgage Capital has entered into the Master Repurchase Agreements to finance its acquisition of residential mortgage loans, and Radian Group has guaranteed the obligations of certain of its subsidiaries under these loan repurchase facilities. Breaches of the financial and other covenants or a decline in the value of collateral pledged under these agreements could trigger immediate payment obligations, which Radian Mortgage Capital may be unable to satisfy. If Radian Mortgage Capital is unable to satisfy its obligations, Radian Group could be required to satisfy the obligations directly pursuant to its guarantee of Radian Mortgage Capital’s obligations under the Master Repurchase Agreements or indirectly through capital contributions to Radian Mortgage Capital, which could impact Radian Group’s available liquidity. See, “We face risks associated with our Mortgage Conduit business” and “Our borrowing facilities and the Parent Guarantees we provide for the Master Repurchase Agreements to finance loan purchases in our Mortgage Conduit business contain covenants that are restrictive and could limit our operating flexibility. A default under a borrowing facility or these Parent Guarantees could trigger an event of default under the terms of our senior notes. We may not have access to funding under our borrowing agreements when we require it.”

In addition to available cash and marketable securities, including net investment income earned on such investments, Radian Group’s principal sources of cash to fund future liquidity needs include: (i) payments made to Radian Group by its subsidiaries under expense- and tax-sharing arrangements and (ii) to the extent available, dividends or other distributions from its subsidiaries. See Note 16 of Notes to Consolidated Financial Statements for additional information on Radian Guaranty’s ability to pay dividends.

Radian Group’s expense-sharing arrangements with its U.S. principal operating subsidiaries require those subsidiaries to pay their allocated share of certain holding-company-level expenses, including interest payments on Radian Group’s outstanding senior notes. The expense-sharing arrangements between Radian Group and our mortgage insurance subsidiaries, as amended, have been approved by the Pennsylvania Insurance Department, but such approval may be modified or revoked at any time.

In light of Radian Group’s short- and long-term needs, it is possible that its sources of liquidity could be insufficient to fund its obligations. If this were to occur, we may choose not to pursue certain actions, such as issuing dividends or repurchasing shares of our common stock, or we may elect to reduce the levels of these activities to preserve our available liquidity. In addition, we may seek to increase our available liquidity, including by seeking additional capital, incurring additional debt, issuing additional equity, or selling assets, which we may be unable to do on favorable terms, if at all.

See also, “The use of the Intercompany Note to fund a portion of the Inigo acquisition reduced our liquidity and Radian Guaranty’s PMIERs Cushion, and subjects us to certain conditions and compliance obligations associated with the Intercompany Note which could adversely affect us and our financial condition.”

Our borrowing facilities and the Parent Guarantees we provide for the Master Repurchase Agreements to finance loan purchases in our Mortgage Conduit business contain covenants that are restrictive and could limit our operating flexibility. A default under a borrowing facility or these Parent Guarantees could trigger an event of default under the terms of our senior notes. We may not have access to funding under our borrowing agreements when we require it.

Radian Group is a party to a $500 million unsecured revolving credit facility with a syndicate of bank lenders. As of December 31, 2025, no borrowings were outstanding under the credit facility.

Radian Group’s credit facility contains customary representations, warranties, covenants, terms and conditions. Our ability to borrow under the credit facility is conditioned on the satisfaction of certain financial and other negative and affirmative covenants, including covenants related to minimum consolidated net worth, a maximum debt-to-capitalization level, and limitations on our ability to incur additional indebtedness, make investments, create liens, transfer or dispose of assets and merge with or acquire other companies. The credit facility also requires that Radian Guaranty remain eligible under the PMIERs to insure loans purchased by the GSEs. A failure to comply with these covenants or the other terms of the credit facility could result in an event of default, which could: (i) result in the termination of the commitments by the lenders to make loans to Radian Group under the credit facility and (ii) enable the lenders to declare, subject to the terms and conditions of the credit facility, any outstanding obligations under the credit facility to be immediately due and payable.

In addition, with respect to Inigo, Inigo Corporate Member Limited is a party to a $620 million letter of credit facility with a syndicate of bank lenders, which is guaranteed by Inigo Limited. The facility is used to support Inigo Corporate Member Limited’s Funds at Lloyd’s requirements. The letter of credit was available for use beginning on October 30, 2025, and has a minimum term of four years with an expiration date no later than December 31, 2029. The letter of credit facility contains customary representations, warranties, covenants, terms and conditions, including financial covenants that are standard for such arrangements, including certain metrics relating to Inigo’s financial position and the capital position of Inigo Corporate Member Limited. Compliance with these covenants is required to maintain availability under the facility. A failure to comply with the covenants or other terms of the letter of credit facility could result in an event of default, which could: (i) result in the termination of the lenders’ commitments and (ii) enable the lenders, subject to the terms and conditions of the facility, to declare any outstanding obligations immediately due and payable.

In connection with our mortgage conduit, Radian Group has entered into the Parent Guarantees that guarantee the obligations of certain of its subsidiaries pursuant to the Master Repurchase Agreements. Under these Parent Guarantees, Radian Group is subject to negative and affirmative covenants customary for this type of financing transaction, including compliance with financial covenants that are generally consistent with the comparable covenants in the Company’s revolving credit facility, as discussed above.

Further, the occurrence of an event of default under the terms of a borrowing facility or under the Master Repurchase Agreements if Radian Group fails to satisfy its obligations under the Parent Guarantees, may trigger an event of default under the terms of our senior notes. An event of default would occur under the terms of our senior notes if a default: (i) in any scheduled payment of principal of other indebtedness by Radian Group or its subsidiaries of more than $100 million principal amount occurs, after giving effect to any applicable grace period or (ii) in the performance of any term or provision of any indebtedness of Radian Group or its subsidiaries in excess of $100 million principal amount occurs that results in the acceleration of the date such indebtedness is due and payable, subject to certain limited exceptions. See Note 12 of Notes to Consolidated Financial Statements for more information on the carrying value of our senior notes.

If we are unable to satisfy certain covenants or representations or experience an event of default under a borrowing facility or the Parent Guarantees, we may not have access to funding in a timely manner, or at all, when we require it. If funding is not available when we require it, our ability to continue our business practices and operations, or pursue our current strategy, could be limited. If the indebtedness under a borrowing facility, the Parent Guarantees or our senior notes is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it.